29 January 2003, 16:13  Euro advances as war fears drag dollar

The euro advanced in early deals today as traders ditched the dollar following President Bush's hawkish comments on Iraq in his State of the Nation speech last night. By 0900, the euro was trading at USD1.0872, while against sterling, the single currency was also up a touch at STG0.6602. The greenback had gained yesterday after US Treasury Secretary nominee John Snow declared that he backed a strong dollar, erasing suspense over his stance on the currency. He also offered upbeat guidance on the state of the US economy. "The dollar was mildly higher on the supportive comments but was unable to extend its gains ahead of consumer confidence data, which proved to be broadly in line with expectations, and President Bush's State of the Union address. As expected, it retreated going into the address," said Geraldine Concagh, senior economist, AIB Global Treasury. "Back at USD1.0870/80, the euro looks set for another breach of USD1.09 and a move to USD1.10 (a strong psychological barrier) still seems a reasonable target over the near-term. Even the yen is up against the dollar, which has moved back to Y118 to eye key support around Y117.50," she added. ///www.fxcentre.com

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